The higher rates for certain nations will come into effect on April 9. For example, Trump on Wednesday said China would be subject to a 34%, so-called reciprocal tariff.

“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always ‘late,’ but he could now change his image, and quickly,” Trump said on Truth Social.

Toxic mortgages to subprime borrowers played a major role in the 2007-'08 global financial crisis. This time, investors worry about cracks among prime borrowers spelling trouble for the economy. Prime ...

Individual banks and financial institutions then use this federal funds rate as a starting point to set their own prime rate, or the interest rate passed onto the most creditworthy consumers.

“That would be a concerning environment,” she said, adding that it would call for waiting to cut rates.

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WSJ’s Gunjan Banerji fields subscriber questions about stock market volatility, how tariffs affect municipal bonds and where investors were hiding out. Photo: Photo: Angela Weiss/AFP/Getty ...